Is Venture Capital Right For Me?

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Welcome to the Business Gay podcast, where we talk about all things business, marketing and entrepreneurship. I’m your host, Calan Breckon. And on today’s episode, I have founder and managing partner at Misfit Ventures, Mandy Potter. Mandy has always danced to the beater of her own drum and is now on a mission to invest in others who do the same. With over 15 years of experience building and scaling VC backed startups, raising millions in funding, growing companies to tens of millions in revenue, and even selling one, she’s now channeling her energy into shaping the future and ensuring it’s a playground of possibility for generations to come. I’m excited to chat entrepreneurship and Venture Capital with Mandy, so let’s jump in.

Welcome to the podcast, Mandy. I’m so excited to have you. How are you doing?

[00:01:49] Mandy Potter: I’m doing great. Thank you for having me. I’m really excited that we finally were able to connect.

[00:01:54] Calan Breckon: Right, well, you’re kind of a rock star in the queer entrepreneur space, especially up here in Canada. So I want to dive right in. When did you first start honing your skills as an entrepreneur?

[00:02:05] Mandy Potter: I mean, I could probably go all the way back to being like a child, to be completely honest. Like, I was kind of that kid who had lemonade stands and, like, was like an entrepreneur at heart when. So I actually used to, my mom used to work at this print shop, and she would get all of these old cash registers and those, like, really old Mac PCs, and I would take them and I would bring them home and I would create an office. And this is like me as like an eight year old, ten year old type thing. And so when other kids were, like, watching cartoons on Saturday morning, like, I was conducting business. So this has quite literally just always been a part of me.

[00:02:42] Calan Breckon: I love that. I love that. What, what were the things that, like, you struggled with the most early on when you actually, like, you know, grew up past the eight year old who was working in the basement to, like, actually doing your entrepreneurship? What was the thing you struggled with the most early on in that journey?

[00:03:00] Mandy Potter: There’s. There’s a few things, for sure. One was obviously, you know, being someone who comes from a few different underrepresented communities was being taken seriously. And so I was quite young when I started my first company, and we moved it to Silicon Valley where we, you know, grew it and raised money and lived there for many years. And I would walk into these rooms full, whether it was like a networking event or I was walking into a room full of investors, and everyone would kind of look over and be like, how is she doing here?

I look very different from everyone in the room, especially back then when this is, I’m not going to say how many years ago, but it was quite a few years ago.

And so seeing a androgynous, queer, fully tattooed woman there was just buried out of the norm. And so I think, like, being taken seriously. But I started using that to my strength because it also makes people very curious. So they actually, like, get attracted to that curiosity, right, where they’re like, what are you doing here? And so they come over to me and they ask me questions and they want to know what’s going on. And so now I actually use that to my strength where there’s a point in time where I kind of, like, tried to dull myself down and, like, wear muted colors and that sort of thing. And I was like, screw this. I’m going to be who I am. I’m going to wear bright colors. I’m going to wear pink if I want, and attract, like, the cool people to come and have conversations with. So I’ve really learned how, like, something that could, you know, make people feel quite uncomfortable or maybe insecure is now my strength.

[00:04:34] Calan Breckon: Yes. I love this. Cause I actually just had Bobbi reset also on the podcast, and she spoke about how being a queer, indigenous woman also was, like, the trifecta of all the things that don’t get invested into and how, you know, she played small at the beginning, and then eventually she was just like, oh, screw it. Like, I’m going to be myself. And that just is what led to that success. Do you find that that’s what kind of actually ended up helping you out in the end?

[00:04:58] Mandy Potter: Yeah, I definitely think so. And, you know, I’ve never been a person who, you know, lacks confidence or anything, but it definitely did give me, you know, some feelings of imposter syndrome, especially when I was younger. So I definitely think that building on top of that and starting to see, like, you know what? I’m just going to show up truly as myself. That for sure contributed to some of my success because it opens a lot of different doors. Right. So another thing that I struggled with early was, like, mentorship. You know, I was very young when I started my first company, and so I had a hard time finding the right mentors. Like, what did that look like for someone like me, especially living in the US where there weren’t a lot of people that did look like me and I wanted someone that I could relate to. And so I struggled a lot with finding mentors. But, you know, the more conversations that I had and the more I showed up as myself, the more introductions I was given and the more people were like, oh, wow, you’re like a queer woman in tech. I’m going to introduce you to this person, this person, this person, because they’re also a queer woman in tech. And so, you know, everything kind of just, like, aligned perfectly through that.

[00:06:02] Calan Breckon: Yeah. I’ve found being in the industry, being queer, tends to affect how we do business, because we do business a lot, like, how we do our community, and our community is we have to support each other. We have to come together in community and do that. And so I find that in business, it tends to be the same. Is that what you found as well through that journey?

[00:06:22] Mandy Potter: Yeah, definitely. I completely agree with what you just said.

[00:06:25] Calan Breckon: Yeah. So following the string of investing and getting venture and all that kind of stuff, raising capital isn’t easy for anyone, let alone LGBTQ people and women, as we just said. So what was that experience for you when you were trying to raise capital?

[00:06:44] Mandy Potter: It’s definitely changed throughout time. It also affected the way that I did things in my second and third business. And so, like I said, raising in Silicon Valley as a young queer woman when diversity wasn’t really talked about was interesting because I would walk into those rooms and people would look at me and they would just look at my white, straight male co founder and speak to him only.

And so we got a little bit strategic in our fundraising. There is a lot more resources and funds that are focused on diversity now, but there were still some that existed back then, so we would kind of, like, target those ones, and I would be the one that would do most of the talking, and they would be looking at me and listening to me because that was their mandate. Right. So we did kind of get a little strategic with the types of ways that we were fundraising. But it was difficult. It’s hard to fundraise no matter who you are, even if you are, you know, the epitome of the Mark Zuckerberg type. It’s still difficult, but it’s significantly more difficult for marginalized people who come from different back ends. And, you know, even with my second company, it went quite viral. We shot across Canada really quickly. We. Our revenues were insane.

And I thought about, you know, going out and fundraising at that point. But even to me, as someone who at that, you know, at that moment was, I had a great track record. I had raised millions in capital.

I had been an entrepreneur for many years. At that point, it still felt like a daunting task. And so I actually ended up bootstrapping that company instead of going the route of raising VC funds, because it just. It just. It felt difficult. It felt too hard. I didn’t want to do it. I was too busy.

[00:08:28] Calan Breckon: Yeah.

[00:08:28] Mandy Potter: Yeah. It’s definitely different. You know, the.

It’s getting better, but it’s also not because we’re seeing more funds that are coming out, that are focused on diverse groups, which is amazing. But we’re also seeing the data trend downwards, which is terrifying. You know, how can both exist at the same time? And so hopefully, you know, we can continue pushing forward and seeing the trends go up.

[00:08:52] Calan Breckon: Mm hmm. I want to continue on with this conversation because there’s pros and cons to being VC backed. We know the pro is having cash flow, obviously. What are some of the cons that aren’t always talked about or well understood by entrepreneurs when it comes to being VC backed?

[00:09:10] Mandy Potter: Tons. I mentor and advise quite a few founders, and a lot of them, I advise them to not raise VC funds, which is funny, because I’m now in.

[00:09:21] Calan Breckon: VC, and so it’s a little say.

[00:09:25] Mandy Potter: So it is funny.

I believe in, you know, I believe in the power of ethical VC. I believe in the power of having the right people on your cap table. I believe in the power of capital and how that can, you know, influence the growth of your company. But I also think that the majority of companies are not poised or not, you know, the right setup to be VC backed.

Even if you are, there is a lot of things to consider.

I can list a bunch off, like dilution. Right. Having lower ownership of your company, the time it takes to fundraise especially as an underrepresented founder, you’re putting in nine to five plus hours, five plus days a week, just fundraising. So you’re taking away all of the time that you could be spent in growing your company, finding product market fit, building out your products and your fundraising instead. So you’re taking away a lot of time that the focus could potentially be spent in better ways.

You can lose a lot of autonomy. So there are some VC’s that will breathe down your neck or have certain stipulations when it comes to funding. So you typically have to then have a board who’s going to be watching what you’re doing. You need to be having updates, and those updates better be good or else there’s going to be more conversations. So you definitely lose some autonomy.

And that also sort of leads to needing to also exit at a certain time. Right. Like VC’s need to, you know, have returns for their, their LP’s and so they expect a return or an acquisition at a certain point and that may be sooner than you want it to be. And so, you know, it really depends on the type of business that you’re trying to build. And I am a big believer in sustainable businesses and I’m a big believer in being your own boss. But that doesn’t always have to mean being BC backed. Like there’s something really, really beautiful and building an amazing company where you get paid really well, you get to make your own schedule, but you don’t have the stress of, you know, having certain people on your cap table or lowering your ownership and that sort of thing. So there’s pros and cons to both, for sure.

[00:11:37] Calan Breckon: Okay, let’s shift it a little bit and talk in the angel sphere of things, because I know there is a difference between VC and angel per se. I would think angels are more kind of earlier on, seed kind of vibe. What would your take be on in regards to angels and taking on those kinds of investments earlier on?

[00:11:56] Mandy Potter: It’s definitely a different ballgame.

I know for me, even some angel investments have been the ones that I remember the most because of how willing they were to help. And they had such, you know, they had such lower ownership too, and they had less skin in the game. But there is a different, you know, when you’re talking about a firm versus an individual that has excess capital, that they’re able to invest in something that they really believe in, it’s a, it’s a completely different ballgame. Um, and so, yeah, I mean, there was a company that I just, you know, I looked at their financials, I took a deep dive into their product and what they’re trying to do, and my suggestion to them was, don’t go after VC. If you really need cash right now, um, try to go get some angels on board, but you don’t need to do a significant raise right now. Um, like, your revenue looks okay, you can survive another day, you can breathe, you’re paying everyone pretty well.

The pros didn’t outweigh the cons, and so that was my suggestion to them. And there’s a whole bunch of different types of funding, right? There’s non dilutive funding, getting grants and things like that. So there’s not, you know, I think that we sort of, we look at VC as like this badge of honor, and people really, really hold onto that tightly and they’re like, I need to raise VC, and I want to raise millions of dollars and be in TechCrunch and all these things. But that’s not always the best case for everyone. Sometimes it’s getting a few angels on board for ten k, 25k checks and being able to get to that next step. And then maybe it makes sense to do a bigger fundraise, or maybe it’s non dilutive funding, maybe it’s doing more pitch competitions and winning them and also being able to hone your pitching skills at the same time. So, yeah, it really depends on the company and where they’re at.

[00:13:42] Calan Breckon: Yeah, it’s no surprise or it’s no secret, I should say, that the economy right now is in restrictive mode and things are pulling back. Um, would you say that it would be a smarter or wiser idea to maybe focus on angels currently instead of going after VC’s just in the current economic state we’re in completely depends on the business.

[00:14:02] Mandy Potter: It would be hard to, to have a generalized answer to that.

If someone is at a point where, you know, having an influx of a million bucks or $2 million is going to significantly impact their growth in a short period of time, then it probably makes sense.

But if there’s, you know, it depends on the industry they’re in, it depends on what they’re trying to achieve, it depends on their end game. It depends on a lot of things. So it’s hard to answer that in general terms. But to me, majority of companies aren’t vc backable companies, and that’s why majority of companies do not raise VC funds and they aren’t successful with it.

And so if I want to be general, then sure, yeah, angel funds or non delegative funding makes sense for a lot of companies, but there’s definitely thousands out there that should go out and get VC.

[00:14:55] Calan Breckon: Definitely. Yeah, I think Bobby just talked to me about how she’s setting off on their b raise. So good luck. Good luck to virtual gurus. They’re doing amazing stuff here in Canada.

So switching gears over to the other side. So now you’re on the other side of that investor table with misfit ventures. Why is, is this next chapter important for you? And what do you hope to achieve with misfit ventures based upon what you kind of just said about venture?

[00:15:23] Mandy Potter: Yeah. So I, being a young queer woman trying to raise capital, I knew at like, 19, 2021 that I was going to sit on the other side of the table. It’s a little atypical in this space. I think a lot of people have some interesting momentum towards venture and what gets them into venture.

A lot of people don’t go, you know, as a teenager, go, like, I want to be a venture capitalist. Like, that’s just not typical. But because I was so young starting my first company, and I had those experiences, so young, and I saw the bias firsthand, I just knew, like, that was my future. And I had someone ask me many years ago, like, if you were going to retire, say you made all this money and you’re going to retire, how would you spend your days? And aside from saving dogs, which is my other passion, I said that I would invest in companies and support them. And so when I got to this point in my career, I was kind of like, well, I can do that now. I don’t have to wait till I’m retired. This is a job, and this is. So I’ve kind of been reframing even the idea of retirement in my head. And I’m like, this is my retirement because I want to be doing this until I truly retire, which, who knows if I ever really will. But I’ve been reframing, like, the idea of retirement in my head and being like, this is my retirement because right now I’ve, you know, I’ve gone a year now without making a paycheck. I’m going to go another significant amount of time without making a paycheck, which is a huge privilege.

But, and I also, to be honest, probably in one of the busiest I’ve ever been in my life. And that says a lot, being a former founder, like a recovering founder, I’ll call it.

But I think that I truly am happier in my career than I’ve ever been. So if you think about it, like, I have no money that coming in, I’m busier than I’ve ever been. But I feel so much like.

I feel like I’m truly going to have impact with this. And so that’s where I’m at in my career is like, I want to. So we’re starting Canada’s first LGBTQ BC fund. It’s going to be one of the largest in the world as well. But my whole goal, and I should say our team’s whole goal, is to prove queer investability. And there’s a huge responsibility that comes with this, with being the first fund in Canada. You know, it’s not just like, oh, we’re doing something really unique and cool and rad and all these things. It’s like, no, we have a huge responsibility as the first because we’re trying to prove that investability. And so this isn’t just about being like, okay, let’s get some cash into the hands of people that deserve it. And they, I know you’ve had Sam on the podcast before, and he’s share all the stats of how queer founders overachieve significantly, but it’s about convincing the rest of the ecosystem that these people should be invested in, and this is the reason why. And so we don’t take that lightly.

But for me, it’s really about creating that significant impact in queer lives, even beyond the capital, and helping these queer founders get to series a and beyond and the impact that they’re having with their companies.

We’re not just touching them, we’re touching all of their customers. And it’s a really unique and special way to have a big impact.

And so, yeah, I think for us with misfit ventures, it’s about proving that queer investability and having as much impact on the community as possible.

[00:19:00] Calan Breckon: I love that you’re right now the busiest that you’ve ever been and you’re a recovering founder. And it goes to show that when you give the gift of time, when you’re able to give the gift of your time genuinely and the gift of your knowledge and share that with people, that you can see that making a difference in their life, it’s such an amazing place to be able to be. And I think a lot of people want to be in that place. And if they could afford to, that’s what so many people on this planet would be doing. They would be in that position, especially people who come from our backgrounds, our community. We know what it is like to be on the other side. And so now we need to kind of create our own safe spaces in these places where it normally wasn’t safe spaces for us to be like, nope, we’re here, we’re queer, we’re gonna stay around forever. We’re not going anywhere. And it’s really important. So thank you for doing that. Thank you for championing us in the way that you are.

[00:19:57] Mandy Potter: Yes, thank you so much. I truly believe in, you know, the power of community and bringing these underrepresented founders into the spotlight and showcasing that they do deserve to be funded because we just, you know, we see how many BIPOC people, how many women, how many queer people are just not being funded and how much more difficult it is for them and the lack of resources they have and that sort of thing. And so, like I said, it’s a big responsibility, it’s a big privilege to be in the position that I’m in to say, I’m going to hold off on a paycheck for x amount of time so that I can build this out. But I also see it a bit as my duty because I have that privilege. And so it’s like, what do you do in a position where you can be in that place of, I can take some time off to build something really meaningful and impactful that’s going to change, hopefully thousands upon thousands of lives through everything it touches.

It feels like my duty to be a part of that change.

[00:21:01] Calan Breckon: Yeah. And I’m a firm believer, big believer, that Canada as a whole hasn’t been great at investing in entrepreneurship. And I think that that’s one of our economies downfalls, especially in the current ecosystem we’re living in. And so you and, you know, the folks at Misfit Ventures and other organizations working in this space to really foster and pick that up and take it and prove to Canada, prove to everyone else, that it’s like, this is a place that you need to be spending that money and investing that money. I can’t wait to see the things that you all turn out over there.

[00:21:36] Mandy Potter: Thank you. Yeah, we’re very excited.

[00:21:38] Calan Breckon: Do you have, do you have any, like, goals or things that you can share? Because I know it’s just, it’s getting started. So is there anything kind of concrete you can share, or is it, do you want to leave that for a little bit later?

[00:21:50] Mandy Potter: There’s nothing I’m able to share right now. All I can say is that everyone we’ve talked to in all different forms and parts of the ecosystem are extremely excited about this. A lot of people cannot believe, you know, when we say we’re starting the first queer fund. They’re like, oh, yeah, crazy. That’s. That hasn’t been done before. You’re right. You know, like, it’s amazing to see some of the progress that we have, like, with BKR, the first black fund and Raven indigenous fund and all the women funds that are out there.

But there was a gap, and that gap was that there was no LGBTQ plus focused fund. And so, you know, myself and Doug and Sam saw that gap, and we all have a passion for this. And I’m so glad that I found that team that I did because they’re just amazing and the best people I could possibly be doing this with. But, yeah, I can’t share anything concrete right now, but what I can share is that people are stoked and we’re just as stoked as them.

[00:22:49] Calan Breckon: Nice.

[00:22:49] Calan Breckon: Yes. I’m so glad it’s coming here because there’s a couple popped up in the US, chasing rainbows and such, but we didn’t have anything here in Canada, so I’m very excited to watch what happens. Where can folks find out more or.

[00:23:01] Mandy Potter: Best contact you so you can find me on LinkedIn. It’s just Mandy Potter. That’s probably the best place to find me or Mandy at TheMisfits.VC.

[00:23:11] Calan Breckon: Fantastic. And I’ll make sure to have those in the show notes for everybody who’s listening. Mandy, this has been absolutely fantastic. Thank you so much for sharing your time with me today.

[00:23:19] Mandy Potter: Thank you for having me. It was great.

[00:23:21] Calan Breckon: Thanks for tuning in today. Don’t forget to hit that subscribe button. And if you really enjoyed today, today’s episode, I would love a star rating from you.

The business gay podcast is written, produced, and edited by me, Calan Breckon. That’s it for today. Peace, love, rainbows.